Against this backdrop, I believe investors should take a balanced approach by combining growth, defensive and dividend-paying stocks to optimize returns while managing risk. With that in mind, here are my three top picks.
Celestica
Celestica (TSX:CLS), a leading electronics manufacturing company, has delivered returns of approximately 195% over the past twelve months, beating the broader stock markets. The stock’s strong performance was supported by consistently impressive quarterly results and management’s improved outlook.
The rapid adoption of integrated artificial intelligence (AI) tools by companies and individuals is driving a sharp increase in demand for computing power. To meet this growing need, hyperscalers are increasing their investments to expand and upgrade their infrastructure, increasing demand for Celestica’s products and services. At the same time, the company continues to invest in innovation, including the development of advanced switches and storage solutions, further strengthening its competitive position.
Buoyed by these favorable industry trends, Celestica management expects revenue and adjusted earnings per share (EPS) to grow 26.4% and 52%, respectively, in 2025, followed by 31.1% revenue growth and 39% adjusted earnings per share growth in 2026. Despite the strong stock, the stock trades at a reasonable price-to-sales ratio of approximately 2.4 over the trailing twelve months, making Celestica an attractive buying opportunity for growth-oriented investors.
Waste connections
My second choice is Waste connections (TSX:WCN), a non-hazardous solid waste management company. It is mainly active in secondary and exclusive markets in the United States and Canada, where it faces less competition and benefits from structurally higher margins.
Waste Connections has successfully pursued a balanced strategy of organic growth and disciplined acquisitions to expand its footprint and improve financial performance, supporting strong long-term share price appreciation. Over the past ten years, the company has achieved a total return of over 440%, which translates into an impressive annualized return of approximately 18.4%.
Looking ahead, management expects to maintain an active acquisition strategy, supported by a strong balance sheet and robust free cash flow generation. The company also has a healthy pipeline of private acquisition targets in the United States and Canada, which could collectively generate $5 billion in annualized revenues over time. At the same time, WCN continues to deploy advanced technologies to improve operational efficiency and profitability.
Additionally, reducing voluntary employee turnover, improving employee engagement and strengthening safety metrics support margin growth. Given its resilient business model, steady growth profile and defensive characteristics, WCN would be well positioned to stabilize your portfolio.
Enbridge
My final choice is Enbridge (TSX:ENB), a high-quality dividend stock that has increased its dividend for 31 years in a row and currently offers an attractive yield of approximately 5.96%. As a diversified energy infrastructure company, Enbridge operates more than 200 revenue-producing assets and has minimal exposure to commodity price fluctuations.
Approximately 98% of Enbridge’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) is generated from regulated assets or long-term, contracted agreements, while approximately 80% of adjusted EBITDA is indexed to inflation. This highly stable business model reduces sensitivity to economic cycles and market volatility, allowing the company to generate predictable, reliable cash flows that have supported consistent dividend growth over the past decades.
Looking ahead, Enbridge is expanding its asset base through a $37 billion secured capital investment program, with projects expected to enter service over the next four years. These investments could boost earnings and cash flow growth, allowing the company to return approximately $40 billion to $45 billion to shareholders over the next five years. Taken together, Enbridge’s sustainable cash flows, visible growth pipeline and strong shareholder returns make it an excellent buy for income-oriented investors.
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